Bloomington bodes well for Catalent workers, says Kelley School leader
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The director of the Center for the Business of Life Sciences at the Indiana University Kelley School of Business says the decision by New Jersey-based Catalent Inc. (NYSE: CTLT) to lay off hundreds of employees in Bloomington is not surprising considering the low number of people who have received the latest vaccine booster for COVID-19. Catalent this week said it would let about 400 employees go in an effort to cut costs after quickly ramping up production of vaccines over the last two years. However, George Telthorst says there may be a silver lining for the affected employees.
Telthorst discussed the move by Catalent in an interview with Inside INdiana Business.
“[They] hired a lot of people and really put in 24/7 to do it. Seeing the fact that the booster is not being used as much, it’s not a surprising outcome,” said Telthorst. “Additionally, as they gained experience in making it, they became more efficient. So, that also, I think, may have played a factor in this.”
In an internal message to employees this week, Catalent Bloomington General Manager Andrew Espejo said the company met the call to develop and manufacture the vaccines “regardless of the cost,” but added that “ignoring the costs is not a sustainable strategy for any business over the long term.”
Telthorst said the vaccines, however, are not the only product made by Catalent and there could still be room for growth.
“They make a variety of products for a variety of companies. Vaccines [were] not their only volume, and I think they’ve had success growing their other business,” he said. “Additionally, in development there is a combined flu and COVID vaccine. If that gets approved and comes out down the road, I think that would also be a significant shot in the arm in terms of volume and growth.”
In a statement to Indiana Public Media, Catalent said it is offering severance and job transition support to the affected employees.
Telthorst says Catalent’s loss of employees could be a gain for other life sciences companies with a presence in the area, including Cook Medical, Baxter (NYSE: BAX), and Singota Solutions in Bloomington, as well as Boston Scientific in nearby Spencer.
“Bloomington’s really lucky in that we have a pretty healthy life sciences ecosystem here. We have four other employers in the area, and they have all been on the hunt for further workers. The chance to obtain experienced people that are leaving Catalent I think means that those folks won’t have a lot of trouble finding replacement positions.”
In a statement posted Wednesday on Facebook, Bloomington Mayor John Hamilton said the city would also work to assist the affected employees in finding new employment.
Telthorst says while the number of employees being laid off is significant, Catalent still employs more than 3,000 workers in Bloomington. That, combined with the company’s previously-announced plans to expand capacity in the city bodes well for the future.